Enacted more than 25 years ago with bipartisan support, the 340B program was designed to help healthcare safety net providers deliver more affordable outpatient prescription drugs to vulnerable or uninsured patients.

These safety net providers include certain hospitals, such as disproportionate share hospitals, or DSH hospitals, and children’s hospitals, as well as federal grantees, such as federally qualified health centers and Ryan White HIV/AIDS clinics. Drug manufacturers provide lifesaving medicines at steep discounts to participating safety net healthcare providers, who are then expected to improve or increase care for vulnerable or uninsured patients. While federal grantees are held to a high standard and are required to report how they are using 340B to help patients, hospitals are not held to that same requirement.